Bitcoin Price Today: Exchange Supply Hits Low At 1.7M BTC Ahead ETF Second Wave

Coingapestaff
May 20, 2024
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Bitcoin News: Exchange Supply Hits Bottom At 1.7M BTC, Price To Rally?

Highlights

  • The Bitcoin exchange supply has plummeted to 1.7 million BTC.
  • The drop in BTC's CEX supply indicates a decrease in sell pressure, potentially influencing a price rally.
  • Crypto analyst Ali Martinez spotlighted a key support level for the Bitcoin price and suggested a surge if it holds.

The Bitcoin (BTC) exchange reserve has reached an all-time low, plunging to nearly 1.70 million BTC. This significant decrease has sparked discussions about the potential for a price rally. The surge is expected to be driven by a combination of demand shock and inelastic supply dynamics.

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Bitcoin Exchange Reserve At All-time Low

Thomas Fahrer, co-founder of Apollo, highlighted the current market sentiment in a post on X. He stated, “Bitcoin Exchange Reserves are at all time lows. Right on time for a second wave of ETF Flows.” Moreover, he believes that “demand shock + inelastic supply” will lead to a parabolic run in the Bitcoin price.

His statement underscores the optimistic outlook among investors who see this low reserve level as a precursor to a substantial price increase. Currently, the Bitcoin exchange balance stands at $1.72 million BTC, according to Coinglass data.

Exchange reserves are a key metric in understanding market dynamics. They represent the cumulative result of exchange inflows and outflows. Moreover, a decreasing trend in exchange reserves suggests a reduction in selling pressure, as fewer coins are available for sale on exchanges.

Conversely, an increasing trend typically indicates more coins are entering the market, increasing the selling pressure. The current drop in the Bitcoin exchange reserve implies that market participants are withdrawing their coins from exchanges. The withdrawal is likely for long-term holding rather than immediate sale.

Hence, this behavior points to a bullish sentiment, where investors expect higher future prices and are thus reluctant to sell at current levels. Additionally, Thomas Fahrer provided insights into institutional investment trends, mentioning Horizon Kinetic Asset Management’s substantial allocation to Bitcoin. He revealed, “Forget 2-3% Allocation. Horizon Kinetic Asset Management has $913M of #Bitcoin invested in IBIT + GBTC making up 14% of their $6.5B AUM. This is investing.”

The second wave of Bitcoin ETFs is imminent with some expecting a $1 billion net inflow for the current week. Furthermore, increased institutional is expected, which could boost investor confidence and push the BTC price higher. Additionally, the ETF inflows will take BTC off the market, accelerating supply crunch.

Also Read: Bitcoin Price To Hit New Highs, But There’s A Condition

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Will BTC Price Regain Momentum?

Bitcoin has already shown signs of reversal after it rebounded above $67,000 after losing momentum earlier. However, Bitcoin’s 24-hour price change is still in the red. At the time of reporting, the BTC price was down 0.54% to $67,030.16 on Monday, May 20. The oldest crypto boasted a market cap of $1.31 trillion.

On the contrary, the 24-hour trade volume for BTC soared 38.91% to $22.60 billion. On the other hand, Bitcoin longs liquidated $16.71 million, which could drive the BTC price lower. Nonetheless, shorts gave tiff competition with over $10 million liquidations.

Crypto analyst Ali Martinez also weighed in on the situation, noting a critical support level for Bitcoin. In a post on X, he wrote, “With over 530,000 $BTC transacted at $66,250, this is a crucial support level! If it holds, #Bitcoin has strong potential for further gains.” This observation suggests that if Bitcoin maintains its price above this support level, the market could see further upward momentum.

Also Read: Bitcoin Whale Buys 1,590 BTC Amid Price Flux, What’s Next?

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
CoinGape comprises an experienced team of native content writers and editors working round the clock to cover news globally and present news as a fact rather than an opinion. CoinGape writers and reporters contributed to this article.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.